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FF, housing policy and the builders

Thu, Sep 7, 2017, 00:10

Sir, – In recent weeks Fintan O’Toole has at great length called upon the people of Ireland to follow him in adopting a more challenging and complex view of identity. It is therefore surprising that he should so soon afterwards have chosen to write Tuesday’s crass and superficial commentary on Fianna Fáil’s housing policy (“Fianna Fáil has a bad case of builder’s bum”, Opinion & Analysis, September 5th).

Instead of addressing the full policy, he unfortunately chose to caricature one element of it and compare it to an unclear story about the purchase of a pub a quarter of a century ago.

Because Fintan O’Toole decided that there was no need to complicate his piece with any context or extra information, let me explain what we have been talking about concerning increasing house supply.

We have for a number of years been pointing to the inevitability of the housing emergency that has grown because of the neglect and lack of basic planning by the Fine Gael government.

This applies to every type of housing – from private rental and social housing to owner-occupier.

The decision of Fine Gael and Labour ministers to effectively abandon the social and affordable housing sector has caused particular destruction – with there being in place today 6,000 fewer social houses than there would be if the rate of building in 2010 had been maintained (just 2,400 have been built since 2011).

This is not to mention the damage done by their decision to reduce by half the Part V obligation on developers (which provided 16,000 new social and affordable homes) and to abolish all affordable housing schemes for low- and middle-income workers in 2012.

The sole objective of our policy is to increase the supply of more affordable housing and we have proposed a wide range of measures to achieve this. This prioritises the interests of individuals and families, not builders or developers.

These include a return to the building of significant numbers of social and affordable houses by local authorities and approved housing bodies. But we cannot ignore the role of the private sector. The reality is that the State will never be able to build enough social and affordable housing to accommodate housing needs of all low- and middle-income households. It is fantasy to suggest otherwise.

This is why we proposed to directly incentivise the construction of units (houses or apartments) to be sold below affordable price points. This would involve the application of the special rate of VAT (9 per cent rate) only on residential properties sold below an affordability threshold, such as €350,000 to €400,000.

A unit sold above the affordability threshold would not be able to claim special rate VAT reduction.

We still need economic analysis from the Department of Housing to assess the full impact of this on the market and what the cost to the exchequer would be. While we have asked for the specific information, it has not been provided.

The department costing of €240 million of our proposal is overblown as our special rate VAT reduction is proposed only for units sold below an affordability threshold, whereas the department costing is for all residential units.

To suggest that this is some dark, corrupt idea is absurd. If Fintan O’Toole wants to argue that it wouldn’t work he is welcome to do so, but this type of ad hominem attack is not what one would expect from the holder of a George Orwell award for commentary. – Yours, etc,